DIGITAL INNOVATION AND BANK PERFORMANCE IN NIGERIA

ABSTRACT

Over the last two decades, the Nigerian banking sector has witnessed some upsurge in the use of technology for service delivery. However concerns have been expressed as to whether cost and other challenges of adopting information technology can be justified by performance. Accordingly this study sought to examine the relationship between different e-banking channels and the profitability of banks in Nigeria, four e banking channels (Automated teller machine, Point-of-sale, Internet banking and Mobile banking where identified and regressed against Total profit (TP) of Deposit money banks operating in Nigeria between 2010-2019. An Ordinary least squares data regression model was formulated and tested. The result of the study shows that ATM value has a positive and significant relationship with total profit. POS value, Internet Banking volume and Mobile Banking volume has a negative and insignificant relationship with total profit, while Internet Banking value, Mobile Banking value, ATM volume and POS volume has a positive and insignificant relationship with total profit. The study also concluded that there exist an insignificant relationship between ATM value and volume, Internet banking value and volume, Mobile banking value and volume, POS value and volume on banks performance. The study recommends that critical stakeholders and beneficiaries of electronic banking- the government, regulatory authorities and the bank should elaborate to put in place an enabling operating environment and an effective regulatory framework to bring about optimal deployment of these services to customers.